'Strong interest' in Waterford Wedgwood

Hopes were rising last night that Waterford Wedgwood, the china and crystal
group, could be saved after administrators Deloitte revealed they had met
with a potential buyer.

Waterford Wedgwood dates back to the 18th century and is controlled by Irish media tycoon Sir Anthony O'ReillyPhoto: NewsCast

By Graham Ruddick and Yvette Essen

8:18PM GMT 05 Jan 2009

Waterford Wedgwood, whose origins date back to the 18th century and is now controlled by Irish media tycoon Sir Anthony O'Reilly, saw receivers called into its Irish-based parent company and some of its subsidiaries yesterday after lenders ran out of patience with the company.

Deloitte was then later called in as administrators to Waterford Wedgwood UK plc and subsidiaries including the Wedgwood and Royal Doulton brands.

However, Angus Martin, the joint administrator, said strong interest has already been shown in rescuing the businesses and its "quintessentially classic brands".

"What I can say is that at the moment we are already talking to one interested party who we have actually met with," he added. "They are interested in purchasing the business as a going concern."

Mr Martin confirmed that the talks were with a party – believed to be a US private equity group – that was interested in the business prior to it entering administration. However, Waterford Wedgwood's €449m (£416m) debt mountain could obstruct any deal.

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He added: "I am very pleased with the level of interest that has already been forthcoming."

Waterford Wedgwood employs 2,700 staff in the UK and Ireland, including 600 staff at its manufacturing base in Barlaston, Stoke-on-Trent, with 19 stores and 120 concessions.

The company, formed in 1986 when the Irish crystal group Waterford bought Wedgwood for £250m, has been a loss-making business for some time, reporting a pre-tax loss of €63.2m for the six months to October 4. It has relied heavily on support from Sir Anthony and his brother-in-law Peter Goulandris, who own 60pc of the business after committing approximately €400m over the last five years. However, the pair now face losing millions. Sir Anthony, the chairman and also the chief executive of Independent News & Media, said: "We are consoled only by the fact that everything that could have been done, by management and by the board, to preserve the group, was done."

Pension experts have also warned that the company's pension schemes have fallen further into the red since the group announced a €147.9m deficit in March 2008. According to the group's annual report and accounts, just under half of its assets were invested in equities.

Independent pensions expert John Ralfe said the Pension Protection Fund (PPF), which pays out pensions to members of troubled pension schemes, is likely to be hit. He said: "The UK deficit is at least £100m with the PPF liable for around £50m of this." Punter Southall estimated the deficit at between £50m to £100m.